Russian Venture Capital scouts for tieups to enter India

RVC manages assets of about $500 million (about Rs 3,326 crore) across 22 funds. It is keen on joint ventures with Indian entities across sectors.Biswarup Gooptu | ET Bureau | May 21, 2016, 10:58 IST

Russian Federation-backed Russian Venture Capital (RVC) is scouting for Indian ventures to partner its portfolio companies, as the fund-of-funds looks to enter and make a mark in Asia’s third-largest economy.

RVC manages assets of about $500 million (about Rs 3,326 crore) across 22 funds. It is keen on joint ventures with Indian entities across sectors, particularly in education, biotechnology, renewable energy and the broader healthcare space, according to a senior executive at RVC.

“The first task is to promote our companies, and find industrial partners (for them), and try and embed them into India’s, as well as into the global supply chain,” Alexander Potapov, executive director of RVC, told ET. “The next stage will be to find investment partners.”

State-owned RVC will not, however, invest in the consumer and internet sectors, which have traditionally been the largest beneficiaries of risk capital over the last three years, as investors poured in billions to back ventures catering to one of the world’s largest consumer markets.

“There is enough private capital investing in those segments, and they can easily find money,” Potapov said.

RVC, which was formed in 2006, and is a wholly-owned subsidiary of the state’s Federal Agency for State Property Management (Rosimuschestvo), is also one of the country’s top development finance institutions. It primarily focuses on making seed and early-stage investments.

The fund-of-funds acts as a limited partner in about 20 venture capital funds, and has also set up three ‘daughter’ funds, in which it has provided 90% of the corpus.

According to Potapov, RVC has identified about 50 companies from its portfolio of over 200 ventures, which have recorded turnovers of about $10-$20 million, and are mature enough to expand in geographies outside its domestic market.

“It will depend on the activities undertaken by the trade representatives, but I think it will take us about a year for all of this to take root,” Potapov said.

India and Russia have held discussions to boost economic ties, and have targeted achieving bilateral trade worth $30 billion (about Rs 2 lakh crore) over the next 10 years, a three-fold increase from the current $10 billion.

Separately, Russian billionaire Yuri Milner, also perceived as one of the most celebrated Silicon Valley tech investors, has bankrolled some of India’s biggest startups, including, Flipkart, India’s biggest ecommerce company, ride-hailing app Ola, and hyper-local delivery service Grofers, among others, through his investment firm, DST Global, as well as in his personal capacity.

Separately, in February this year, it was reported that National Investment and Infrastructure Fund (NIIF) Ltd has signed an initial pact with Russia’s state-run Rusnano OJSC to set up a fund - Russia-India High Technology Private Equity Fund - that will look to invest in high-technology projects in India.